Correlation Between Boyd Gaming and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Boyd Gaming and NMI Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boyd Gaming and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boyd Gaming and NMI Holdings, you can compare the effects of market volatilities on Boyd Gaming and NMI Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boyd Gaming with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boyd Gaming and NMI Holdings.
Diversification Opportunities for Boyd Gaming and NMI Holdings
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boyd and NMI is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Boyd Gaming and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Boyd Gaming is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Boyd Gaming are associated (or correlated) with NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of Boyd Gaming i.e., Boyd Gaming and NMI Holdings go up and down completely randomly.
Pair Corralation between Boyd Gaming and NMI Holdings
Assuming the 90 days trading horizon Boyd Gaming is expected to generate 0.82 times more return on investment than NMI Holdings. However, Boyd Gaming is 1.23 times less risky than NMI Holdings. It trades about 0.12 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.07 per unit of risk. If you would invest 6,600 in Boyd Gaming on August 29, 2024 and sell it today you would earn a total of 300.00 from holding Boyd Gaming or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boyd Gaming vs. NMI Holdings
Performance |
| Timeline |
| Boyd Gaming |
| NMI Holdings |
Boyd Gaming and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boyd Gaming and NMI Holdings
The main advantage of trading using opposite Boyd Gaming and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boyd Gaming position performs unexpectedly, NMI Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NMI Holdings will offset losses from the drop in NMI Holdings' long position.| Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc | Boyd Gaming vs. Apple Inc |
| NMI Holdings vs. Boyd Gaming | NMI Holdings vs. SEI INVESTMENTS | NMI Holdings vs. HK Electric Investments | NMI Holdings vs. WisdomTree Investments |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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